Finance minister Enoch Godongwana has read the riot act to Johannesburg mayor Dada Morero, ordering him to immediately halt a R10.3bn wage increase agreement that the Treasury says the city cannot afford.
Last year TimesLIVE exposed a plan by Morero’s administration to quell worker protests ahead of the G20 meeting by committing to salary increases in an agreement with the South African Municipal Workers’ Union (Samwu). That deal has now effectively been stopped, with Godongwana instructing the mayor to “cease implementation of this illegally signed agreement”.
“It has the potential to destroy the sustainability of the City of Johannesburg beyond this term of office, with negative implications for the national economy,” Godongwana said. “You are well aware that the city cannot afford this agreement.”
The minister criticised Morero for making what he described as an “audacious” commitment, particularly as the city’s current adjustment budget is already unfunded in terms of section 18 of the Municipal Finance Management Act (MFMA).
Godongwana warned that failure to comply could trigger punitive action affecting the city’s funding.
“In the event that the city fails to remedy this situation with immediate effect, National Treasury will invoke section 216(2) of the constitution, targeting your July 2026 equitable share instalment,” he said.
It is not only about poor service delivery. There are concerns about governance failures and issues that may impact the financial stability of the City of Johannesburg. The president is aware of these matters, including the letter from the Treasury
— Vincent Magwenya, presidential spokesperson
The wage agreement is just one of several alleged breaches of financial regulations. Godongwana pointed to a “series of violations of legislative and regulatory requirements”, suggesting a broader deterioration in governance and financial management in the metro.
In a scathing letter, the minister outlined multiple concerns, including:
- revenue collection falling short of budgeted targets; and
- persistent weaknesses in cash flow reporting.
“The city continues to face difficulties with cash flow reporting, with notable discrepancies, particularly relating to opening balances and cash from investing activities,” the minister said in the letter.
Additional concerns include:
- failure to comply with municipal regulations on the standard chart of accounts; and
- failure to pay creditors within 30 days, as required by the MFMA.
Presidential spokesperson Vincent Magwenya confirmed that President Cyril Ramaphosa was aware of the situation, saying the issues raised formed part of the rationale for establishing the Presidential Johannesburg Working Group.
“It is not only about poor service delivery. There are concerns about governance failures and issues that may impact the financial stability of the City of Johannesburg,” Magwenya said. “The president is aware of these matters, including the letter from the Treasury.”
It remains unclear how Morero will respond to the mounting pressure as the city faces serious allegations of financial mismanagement.
This is a developing story.
TimesLIVE
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